Nationwide mortgage consumer confidence index rose by 9 points January.
According to a Nationwide mortgage spokesperson, the lenders consumer confidence index for January showed a 9 point increase. This increase is being viewed as an indicator that underlying UK economic conditions are not actually as weak as had been feared.
While the Nationwide mortgage consumer confidence index showed a January increase, the new level of 47 points is actually almost 30 points below average. The lender attributed the increase in consumer confidence to improved industry surveys for both manufacturing and service sectors and a sharp drop in the level of inflation, which was down to 3.6 per cent .
Robert Gardner who is the Nationwide's chief economist commented saying, that the renewed hope of the UK avoiding a second recession could well support sentiment, particularly since the current downward trend in inflation will most likely continue throughout 2012. The upbeat survey has come in the wake of the Bank of England forecast of a lower risk of recession in 2012.
However, the Nationwide mortgage spokesperson said that in light of unemployment figures reaching a 16 year high and, the contraction of the UK economy in the last three months of 2012 , any improvement in consumer confidence could yet prove to be no more than a short term bounce.
UK recovery is expected to remain weak for the first half of 2012 and therefore any significant and sustained increase in consumer confidence will remain unlikely in the short term.
